An environment of integrity is essential for private sector development, promotion of foreign investments and economic growth. Its requirements include building an anticorruption environment, provision of high quality government services, predictability and consistency of government procedures and regulations, and overall transparency of the system.

Increasingly, many African countries are now realising that capable and responsible governments are a prerequisite for development.

All over, initiatives are underway to reduce bureaucratic delays and uncertainties in servicing the business sector and in ensuring integrity, rule of law, transparency and regulatory consistency to all.

Maintaining high level of Integrity and transparency correlates with creating a favourable environment for private sector growth and Investment. If African countries are to meet the Millennium Development Goals (MDGs) both; governments and businesses need to share responsibility in any drive to create a eliminate corruption free in integrity environment that will automatically improve investment environment levels and quality.

The reverse is true. Corruption for instance, can and does sabotage national development. Corruption leads to a loss of government legitimacy and of public trust and support. It inhibits the functioning of the market and distorts the allocation and use of resources, hence hampering trade and deterring investment.

2 Corruption is often a collusive arrangement between some officials in government and individuals in business who have little or no concern for the social, economic, environmental, political or human consequences of their actions. Such decisions are taken not for the public benefit but merely to serve personal interests.

Many countries in this era of democracy and transparency have intensified efforts at deepening reforms in service delivery institutions such as the judiciary, parliament, local government, public service management, etc. Progress has been achieved in many African countries though the journey ahead is long and difficult.

Lack of an integrity environment impedes FDI flows too. Many African countries are pursuing market oriented economic policies, including divestiture of public enterprises, and creating an environment more conducing for business. This includes improving efficiency in production and service delivery. Yet the business environment overall is not yet fully conducive for FDI inflows.

As per Transparent International report 2004 as well as the findings by the Economic Commission for Africa (ECA) study on governance, most of African countries performed badly in efforts to control corruption and creating integrity environment.

There is a clear need to create and nurture an integrity environment which will prevent corruption and create a better environment for private sector development and investment promotion.

3 2.0 RECENT INTERNATIONAL DEVELOPMENTS The International community recognising the detrimental effects of corruption on development, has endorsed the UN Convention against Corruption. The Convention enhances cooperation and mutual legal assistance, particularly regarding return of stolen assets. As more and more countries ratify the Convention, corrupt practices in a foreign country are no longer beyond the reach of domestic jurisdictions.

For Africa the adoption of African Union Convention on Prevention and Combating Corruption and Related Offences was a most significant development. However, as reported by Transparency International, the major weakness of the Convention is that it permits any signatory to opt out of some or all provisions!

Under the NEPAD/African Union Programme, 24 African countries representing about 75% of the continent’s population have agreed to take part in peer reviews of their governance performance – African Peer Review Mechanism (APRM). Countries that endorsed APRM must conform to agreed values in four areas including, democracy and political governance, economic governance, corporate governance and socio-economic development. Tanzania is amongst African countries that endorsed the APRM.

Nevertheless the success of creating an integrity environment and fight against corruption depends on commitment and political will to implement change.

4 3.0 INTEGRITY AND GOOD GOVERNANCE - THE CURRENT SITUATION (STATUS AND CONSTRAINTS) IN TANZANIA

“We have persisted in our resolute struggle against corruption, including through rolling out plans to combat corruption; the establishment of anti-corruption bureaus at the district level; and enhanced accountability for resources transferred from the Central Government to the district level. Tanzania’s efforts in fighting corruption are starting to win international recognition.”

Tanzania like many other Sub-Saharan Africa countries achieved its independence with a severely underdeveloped economy and extremely limited infrastructure. However, Tanzania has made concerted efforts to improve its economy, raise living standard of its people and create a conducive environment for private sector development & investment.

Since early 1980s, governments of developing countries have been supporting and implementing strategies of encouraging competitive free markets, privatisation of state owned enterprises (parastatals), move from closed (no trade) to open (trading) economies and opening up the domestic economy through free trade and attracting foreign direct investment. This was done as a way of recognising the lead role that private sector can play in economic development.

The private sector expressed concern that the system of governance in the region is still tinged with corrupt practices. According to the Transparency International’s annual Corruption Perception Index (CPI) for 2003, out of the 133 countries that were surveyed, the East African countries of

5 Kenya, Uganda and Tanzania ranked relatively high in levels of corruption. The rankings were 122 for Kenya (with a CPI score of 1.9 out of 10), 113 for Uganda (with a CPI score of 2.2 and 92 for Tanzania (with a CPI score of 2.5).

In all the three countries, efforts are being taken to curb corruption as systems are made to become more transparent with better placed to apply the rule of law in government operations. However, a recent PWC report has suggested that the war on corruption in East Africa is being lost because of lack of political will in the high echelons, inadequate funding and equipment for anti-corruption institutions, an inappropriate legal framework and lukewarm enforcement as most bureaucrats who are charged with the responsibility of fighting corruption are themselves corrupt1.

3.2 Integrity and the Fight Against Corruption “Tanzania stands at the threshold of a new era: The new era demands a transformed public service. This will be a service that is truly transparent and accountable to the public. The service will have zero tolerance for corrupt behaviour. The service wil guide the Nation as it crosses irreversibly into a poverty-free zone in the 21st Century.”

H.E. President Benjamin W. Mkapa at the launch of PSRP on June 20th 2000. In most African countries including Tanzania corruption was at a relatively low level during’ colonial rule. However, after independence and the move to single party systems, which concentrated power into small cliques corruption, began to rear its ugly head. As time passed, the integrity environment became dramatically eroded.

1 The East African, November 17-23, 2003.

6 In order to foster integrity environment and create a better environment for investment and private sector development, the Tanzania government has taken several steps.

First, in 1991, the government set up the Prevention of Corruption Bureau (PCB). In 1995, the government formed the Public Leadership Code of Ethics to curb impropriety at higher levels of public service and later it established the Commission for Human Rights and Good Governance (2001). In reality the government was preparing the legal framework to curb corruption and bring about integrity in public service. Later, the government established the Permanent Commission of Inquiry (Ombudsman) in 1996 to check abuse of power by government officials and its agencies.

When, President Benjamin William Mkapa came into power in 1995, he declared war on corruption so as to enhance the integrity environment. As a first step he established the Presidential Commission Against Corruption in January 1996. Ten months later, the Commission produced one of the most respected and commended analyses of corruption by any Africa state (commonly referred to as the Warioba Report).

The report identified areas/environments where corruption occurs and also revealed regulations and procedures that facilitate corruption. It also cited examples of dubious decisions/contracts in several departments that were perceived corrupt.

The Warioba report concluded that there was much evidence of Corruption. The report classified corruption into two categories. The first type relates to those who receive bribes to cater for their daily living needs (Petty Corruption) while the other group involves high level leaders and public officials, who are motivated by excessive greed for wealth accumulation and money (Grand Corruption). The Warioba Report had the further benefit of opening up public discussion on corruption.

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INTEGRITY ENVIRONMENT AND INVESTMENT PROMOTION "The Case of Tanzania"

An environment of integrity is essential for private sector development, promotion of foreign investments and economic growth. Its requirements include building an anticorruption environment, provision of high quality government services, predictability and consistency of government procedures and regulations, and overall transparency of the system. Increasingly, many African countries are now realising that capable and responsible governments are a prerequisite for development. All over, initiatives are underway to reduce bureaucratic delays and uncertainties in servicing the business sector and in ensuring integrity, rule of law, transparency and regulatory consistency to all.

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